Living with the slop in our lives
The High Cost of Everything
Posted October 1, 2023
The above photo, which is repeated in cities, big and small, around the globe, is the reason for high gas prices. Demand. During the pandemic, when driving was cut to the bare minimums, gas prices hit record lows because nobody was buying the stuff. Oil companies couldn’t give it away. They cut production around the world to minimize their losses. Post pandemic driving ramped up, but the oil companies didn’t ramp up production, thus, supply was low, and demand was high, gas was going for top dollar, and the oil companies had an epiphany. Why would they spend billions of dollars to ramp up drilling, only to increase the supply of oil to drive down the price of gasoline and make less money? As long as they produce enough to stave off a shortage and long lines at the pumps, they can continue to rake in the profits, tens of billions per quarter, and the motoring public will be thankful that they can drive all they want.
Still, in spite of the true reason, supply and demand, I hear people say Biden is responsible for the high cost of gas at the pump. Nothing can be further from the truth. “Oh, but he shut down the Keystone XL pipeline.” No he didn’t. Nebraska said no to the pipeline being constructed across its aquifer. Obama upheld the state’s right to unilaterally decide the issue. “But he put a moratorium on gas and oil leases.” He did. Seven of them. In an Alaskan wildlife refuge Trump illegally sold to an Alaska state development agency on the last day of his presidency. However, as of February 2023, oil companies held 12.6 million acres of oil leases and 6,653 drilling permits that were not being produced, along with 77% of 12 million acres of off-shore leases. The oil companies decided not to develop those leases. Not Biden.
Another thing Biden is being blamed for is high inflation, as if he sits behind his desk in the Oval Office and dictates the prices of food, goods, and services. Think about it. Workers are now earning higher pay, most $15/hour minimum wage, and unions strike (or threaten to strike) for higher wages (40% in some cases), more benefits, and shorter work weeks, and employers pay higher wages to attract the most qualified help (sometimes any help they can get). The unemployment rate is at an all-time low. The economy is flush with money at the same time post-pandemic manufacturing/production and supply lines are struggling to catch up. Of course, the result is inflation. What else would anyone expect? So, the Fed boosts interest rates to slow business and consumer spending, in an effort to reduce demand and lower prices. The side-effects are fewer Americans can afford to buy a home, businesses raise prices to cover the increased cost of money, labor, and supplies, (and tariffs), and workers find themselves paying higher prices and, again, in need of higher pay just to survive. It’s capitalism, folks. It’s the American way.
So, in this glutinous pigsty of need and greed, it helps to understand how the system works and accept the fact that we (all of us) are to blame for the deep mud in which we wallow.